BrazAlta Resources Corp.

BrazAlta Resources Corp.

October 17, 2007 10:25 ET

BrazAlta Resources Corp. Files Year End Financial Results

CALGARY, ALBERTA--(Marketwire - Oct. 17, 2007) - BrazAlta Resources Corp. ("BrazAlta" or the "Corporation") (TSX VENTURE:BRX) is pleased to announce that it has filed its audited consolidated financial statements for the year ended June 30, 2007 ("Financial Statements") and related Management Discussion and Analysis ("MD&A"). Copies of the filed documents may be obtained via SEDAR at or on the Corporation's website at


- Together with W.Washington Empreendimentos E Participacoes Ltda., ("W.Washington"), undertook seven well repair and workover operations, drilled two new shallow wells on exploration and production (E&P) properties and continued geological and geophysical interpretation of BrazAlta's vast onshore exploration blocks.

- Developed a detailed drilling campaign for exploration blocks, completing surface leases, permitting and infrastructure in preparation for drilling on numerous blocks.

- Commenced drilling deep horizon exploration and development targets with BCH-02 triple drilling rig, with completions planned subsequent to year end.

- Exited fiscal 2007 with 2% increase in reserves over prior year.

- Incorporated and established BCH Energy Services ("BCH"), exiting the year with an operating Brazilian fleet of two drilling rigs (BCH-01 and BCH-02) and one service rig (BCH-101), as well as having established fully operational field offices (Catu Base) and in-country administration offices (Rio de Janeiro).

- BCH secured four multi-year drilling contracts with Petroleo Brasiliero S.A. ("Petrobras"). It is expected the contracts, excluding renewal options, will generate gross revenues of approximately $80 million US. In addition, BCH successfully provided drilling services to Petrobras under a 100-day drilling contract utilizing its BCH-01 double drilling rig.

- Completed two private placements: one for gross proceeds of $10 million for capital expenditure and working capital purposes and the other for gross proceeds of $3 million, which were used to settle the promissory note payable that arose in fiscal 2006 during the 47.5% working interest acquisition of four producing properties in Brazil.


Selected financial results outlined below should be read in conjunction with the Corporation's Annual Consolidated Financial Statements and related MD&A.

As at and for the Year Ended June 30, 2007 2006
($), except share data
Petroleum and natural gas sales, net
Brazil 3,165,557 966,096
Canada 318,376 225,914
3,483,933 1,192,010
Drilling services revenue 3,184,816 -
6,668,749 1,192,010
Funds used in operations (1) (5,265,945) (1,211,952)
Per share - basic and diluted (0.09) (0.04)
Net loss (7,972,611) (2,995,154)
Per share - basic and diluted (0.13) (0.10)
Capital expenditures
Brazil 9,459,640 9,616,653
Canada 305,057 486,758
Northern Ireland - 84,952
Brazil drilling services 11,811,349 3,313,673
21,576,046 13,502,036
Total assets 39,138,121 27,325,504
Total long-term liabilities 343,075 222,462
Weighted average shares outstanding
Basic and diluted (000s) 61,139 29,152
Production Brazil Canada Brazil Canada
-------- -------- -------- --------
Crude oil (bbl/d) (2) 135 1 134 1
Natural gas (mcf/d) - 108 - 30
Natural gas liquid (bbl/d) - 1 - 3
Total (boe per day) (2) 135 20 134 9
Average prices
Crude oil ($/bbl) 71.49 67.12 N/A N/A
Natural gas ($/mcf) - 7.37 N/A N/A
Natural gas liquid ($/bbl) - 52.09 N/A N/A
Oil equivalent ($/boe) 71.49 44.87 N/A N/A
Operating netback ($/boe)
Commodity revenue 71.49 44.87 N/A N/A
Non-refundable sales taxes (2.11) - N/A N/A
Royalties (4.98) (6.20) N/A N/A
Transportation & processing (12.12) - N/A N/A
Well workover & repair (7.79) - N/A N/A
Operating expenses (22.17) (11.86) N/A N/A
Netback (3) 22.32 26.81 N/A N/A

(1) "Funds used in operations" is not a measure that has a standardized
meaning prescribed by Canadian GAAP and is considered a non-GAAP
measure. Therefore, this measure may not be comparable to similar
measures presented by other issuers. This measure has been presented
above in order to provide shareholders and potential investors with
additional information regarding the Corporation's liquidity and its
ability to generate funds to finance its operations.

(2) 2006 Brazil E&P daily average production figures are based on only four
months of operating activities.

(3) "Netback " per boe is calculated as revenues net of sales taxes and
royalties, less transportation & processing charges, well workover and
repair, operating expenses and then divided by boe produced. Netbacks do
not have a standard meaning prescribed by GAAP and therefore may not be
comparable to similar measures used by other companies.

BrazAlta is a publicly traded Canadian based international oil and gas corporation with operations in Brazil, Northern Ireland and Canada.

BCH is BrazAlta's drilling services subsidiary which provides drilling and workover services in Brazil.

W.Washington is BrazAlta's partner with respect to BrazAlta's Brazilian exploration and production operations in the Reconcavo, Sergipe and Tucano basins of Brazil.

This press release may contain statements within the meaning of safe harbour provisions as defined under Securities Laws and Regulations. The above statements are based on the current expectations and beliefs of BrazAlta's management and are subject to a number of risks and uncertainties that may cause the actual results to differ materially from those described above. BrazAlta does not undertake any responsibility with regard to the accuracy of this press release nor the obligation to update the abovementioned information.

This press release contains certain forward-looking statements within the meaning of applicable securities law. Forward-looking statements are frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. The Corporation cannot assure that actual results will be consistent with these forward looking statements. They are made as of the date hereof and are subject to change and the Corporation assumes no obligation to revise or update them to reflect new circumstances, except as required by law. Prospective investors should not place undue reliance on forward looking statements. These factors include the inherent risks involved in the exploration for and development of crude oil and natural gas properties, the uncertainties involved in interpreting drilling results and other geological and geophysical data, fluctuating energy prices, the possibility of cost overruns or unanticipated costs or delays and other uncertainties associated with the oil and gas industry. Other risk factors could include risks associated with negotiating with foreign governments as well as country risk associated with conducting international activities, and other factors, many of which are beyond the control of the Corporation. A barrel of oil equivalent (boe) is derived by converting gas to oil in the ratio of six thousand cubic feet of gas to oil and may be misleading, particularly if used in isolation. A boe conversion is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead, especially in various international jurisdictions.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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